Economic and Business News

For the week ending, Friday 10th February 2017

1.

Oil sector recovery'll give banks relief - GTBank

With oil and gas loans accounting for about 30 per cent of the total banking industry exposure, an improvement in oil sector receipts will provide relief for banks, enhance repayment of obligations and improve asset performance.

Guaranty Trust Bank Plc stated this in its 'Macroeconomic and Banking Sector Themes for 2017', which was released on Monday

Punch. Tuesday, 7 February 2017

2.

First Bank leads GTBank, Zenith, Access, UBA in top 500 global banking brands

First Bank of Nigeria Limited has been named as the most valuable banking brand in Nigeria in the Top 500 Banking Brands of The Banker magazine of the Financial Timesand Brand Finance, London, United Kingdom for the sixth consecutive time.

First Bank is also the only Nigerian bank in the top 10 banking brands in Africa, along with nine other banks from South Africa, Egypt and Morocco.

The Guardian. Tuesday, 7 February 2017

3.

Uncertainty over Buhari's health takes toll on investments, naira

The uncertainty surrounding the health status of President Muhammadu Buhari is beginning to affect fiscal performance and put pressure on investors to make key decisions.

Already, stakeholders and operators in the private sector have expressed worry about the continued inaction of the Federal Government in the area of fiscal policies' initiation and execution.

They also raised concern over the prolonged failure to appoint substantive chief executives for critical agencies of government, one year after their boards were dissolved.

The Guardian. Tuesday, 7 February 2017

4.

Abuja airport's runway rehabilitation may exceed six weeks

Experts in the aviation industry on Sunday said the rehabilitation of the runway and taxi ways of the Nnamdi Azikiwe International Airport, Abuja might exceed the six-week period scheduled for the exercise judging by the statement of the contractor assigned to handle the project.

According to the Aviation Round Table, a body of industry professionals, the Federal Government must compel the contractor, Julius Berger Plc, to issue a performance guarantee that it will deliver the project on schedule to avoid prolonging the hardship it will bring.

It also noted that about 1.2 kilometres of the NAIA runway had not been available for flight operations due to the poor state of the facility.

Punch. Monday, 23 January 2017

5.

Fitch rates Nigeria's upcoming Eurobond B+

GLOBAL rating agency, Fitch Ratings,Monday, assigned B+ ratings to Nigeria's upcoming $1 billion Eurobond.

A B+ rating is usually the lowest investment grade rating assigned to a security which signifies that the issuer (Nigeria) has a moderate chance of default.

However, some analysts believe that a deeper assessment, shows the concerns foreign investors have about the country's macro-economic and foreign exchange policies. They also say this means the road show embarked on by the federal government team led by Finance Minister Kemi Adeosun and Deputy Governor of Central Bank of Nigeria, CBN, Mrs. Sarah Alade, may not yield much.

Vanguard. Tuesday, 7 February 2017

 

6.

FG secures $7. 5bn loan for Lagos-Kano rail line

The Minister of Transportation, Mr. Rotimi Amaechi, on Monday said the Federal Government had secured $7. 5bn loan for the construction of standard rail gauge from Lagos to Kano.

Amaechi made this known in Ilorin at the North Central Town Hall meeting held in Ilorin for the people of Kogi, Niger and Kwara.

According to him, the loan was secured from a Chinese bank and the ministry is waiting for approval of the National Assembly to access the loan.

Punch. Tuesday, 7 February 2017

7.

Nigeria begins negotiations on CFTA adoption

Preparatory to the 2017 establishment of a Continental Free Trade Area (CFTA) in Africa, Nigeria has commenced negotiations to facilitate the adoption of the trade deal after several months of lagging behind among other trade blocs.

Indeed, three Regional Economic Communities (RECs)-the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC)-had reached an agreement in 2015 to expedite the process towards the operationalization of the tripartite Free Trade Area by finalising outstanding issues.

The AU had set a deadline of December 2017 for the adoption of the CFTA, though the Federal Government explained that the gruelling process of negotiations and adoption therefore, will depend on how much progress is made.

Once concluded, the CFTA will enhance the movement of goods and services and boost trade facilitation within the 54-member bloc of the continent.

The Guardian. Tuesday, 7 February 2017

8.

Major airlines reject re-routes during Abuja airport closure

International airlines are refusing to fly to an alternative hub when the only airport serving Nigeria’s capital shuts down, forcing travellers to make lengthy detours at extra cost.

Nnamdi Azikiwe International Airport in Abuja closes completely for runway repairs on March 8. Domestic and international flights will be diverted to Kaduna, 170 kilometres (105 miles) away.

Nigeria’s aviation ministry has said the planned six weeks of resurfacing work were needed because the runway, which was built in 1982 with a 20-year lifespan, was “dilapidated” and “unsafe”.

The Guardian. Wednesday, 8 February 2017

9.

TRANSPORTATION: Itakpe/Ajaokuta railway line ready in 2018 -FG

Minister of Transportation, Rotimi Amaechi, said the Federal Government has mobilised to site the contractors handling the Central Railway Line and the Itakpe/Ajaokuta Railway Line.

The former governor of Rivers said the contractor has assured that the project would be completed by the first quarter of next year.

The Sun. Wednesday, 8 February 2017

10.

We'll no longer import fuel by 2019 – Kachikwu

ABUJA-THE Minister of State for Petroleum Resources, Mr Ibe Kachikwu, yesterday, in Abuja said Nigeria would no longer import fuel by 2019.

Kachikwu said this at a public hearing on the review of petroleum pricing template for Premium Motor Spirit (PMS) organised by the House of Representatives.

The minister said that within two years, the Federal Government revived refineries that were non-functional to contribute about eight million out of over 20 million litres of petrol consumed in the country daily.

He explained that the Federal Government initiated a model which attracted foreign investors to partner with the Nigerian National Petroleum Corporation, NNPC, to repair the country's refineries within the two-year period.

Vanguard. Wednesday, 8 February 2017

11.

MTN to declare loss over N330bn Nigeria fine

MTN Group expects to report a full-year loss due to a $1bn regulatory fine in Nigeria and for under-performance both in Nigeria and South Africa, the company said on Wednesday.

MTN had agreed in June to pay Nigeria a N330bn ($1.05bn at the time) fine for missing a deadline to cut off unregistered SIM cards from its network.

Shares in MTN, which fell more than 4 percent at market open, were 3.82 per cent lower at 113.25 rand at 07:33 a.m., its lowest level since December.

MTN is the largest mobile phone company in Nigeria, the continent's biggest economy, and accounts for a third of MTN's revenue.

Punch. Wednesday, 8 February 2017

12.

CBN explains forex shortage for oil marketers

Central Bank of Nigeria (CBN) Governor Godwin Emefiele yesterday offered an insight into why oil marketers and dealers in petroleum products have been facing difficulties in getting foreign exchange to procure fuel overseas.

Emefiele, whose representative appeared before the Nnanna Igbokwe-led House of Representatives Adhoc Committee on the Reduction of Petrol Prices explained that the progressive decline in the amount of foreign exchange available to the CBN was responsible for the apex bank's inability to meet the demands of oil importers and marketers .

The inability of the marketers to get forex to import fuel could lead to the scarcity of the product that may push up prices, and increase the cost of production of goods and services .

The Guardian. Wednesday, 8 February 2017

13.

Foreign investors seek 7% yield on Nigeria's Eurobond

Foreign investors attending the federal government's international road show on the upcoming $1 billion Eurobond are seeking interest rate (yield) of above seven percent on the bond.

Finance Minister Kemi Adeosun, Central Bank Governor Godwin Emefiele and other senior government officials have been meeting investors this week in London and the United States on a road-show to issue the bond with a 15-year maturity.

Among other things, investors that attended the London-leg of the road-show held on February 3rd and February 6th, expressed concerns over the Naira exchange rate and the nation's crude oil output.

Vanguard. Thursday, 9 February 2017

14.

FG to open national food reserve to force price reduction in prices

The Federal Government is considering opening the nation’s food reserve as part of measures aimed at drastically reducing food prices in the country.

The Minister of Agriculture and Natural Resources, Chief Audu Ogbeh, disclosed this to State House correspondents at the end of a meeting of the Federal Executive Council presided over by the Acting President, Yemi Osinbajo.

He was joined by the Minister of Information and Culture, Alhaji Lai Mohammed; the Minister of Power, Works and Housing, Mr. Babatunde Fashola; and the Minister of Industry, Trade and Investment, Okechukwu Enelemah.

Punch. Thursday, 9 February 2017

15.

IITA scientists develop new crop spacing method for cowpea

Scientists at the International Institute of Tropical Agriculture, Ibadan, have recommended a new spacing procedure for cowpea cultivation which, if adopted, could give farmers huge harvests.

IITA's Communication Specialist, Mrs Adaobi Umeokoro, in a statement on Thursday said that the new crop spacing technique was the outcome result of a study on the effects of plant density on cowpea performance in the Savannah areas of Nigeria.

It said that the study was conducted at the IITA Experimental Stations in Kano and Zaria during the 2013 and 2014 growing seasons.

Punch. Thursday, 9 February 2017

16.

Budget funding: FG set to borrow another N110bn via local bond issue

As part of its fiscal funding plans, the Federal Government, through the Debt Management Office, DMO, is set to raise another bond amounting to N110 billion for budgetary deficit funding next week.

The bond issue is coming against the backdrop of an emerging discord between executive and the legislative arms of government over resort to borrowings for budget funding.

Next week's bond issue will be the second this year, which in addition to another issue planned for next month, will bring total amount of debt raised in the first quarter of 2017 to N430 billion.

Vanguard. Thursday, 9 February 2017

17.

AMCON takes over Arik Air, appoints Capt. Ilegbodu new MD

Asset Management Company of Nigeria, AMCON Thursday took over the management and ownership of Arik Air and appointed Capt. Roy Ukpebo Ilegbodu as the Managing Director. The airline is indebted to AMCON to the tune of 135 Billion Naira. Operatives of EFCC on Wednesday invaded the premises of the airline and whisked away the Executive Chairman of the airline, Chief Johnson Arumemi-Ikedi to the their Lagos office.

A statement from AMCON yesterday said : "From all indications, respite may have come the way of Arik Airlines currently immersed in heavy financial debt burden that is threatening to permanently ground the airline. For some time now, the airline, which carries about 55% of the load in the country, has been going through difficult times that are attributable to its bad corporate governance, erratic operational challenges, inability to pay staff salaries and heavy debt burden among other issues, which led to the call for authorities in the country to intervene before Arik goes under like many before it".

Vanguard. Thursday, 9 February 2017

18.

IBM invests $70m, targets 25million jobs in Nigeria, others

IBM is investing $70 million in building much-needed digital, cloud, and cognitive Information and Technology (IT) skills to help support a 21st century workforce in Nigeria, South Africa, Kenya and other parts of Africa.

The initiative, "IBM Digital – Nation Africa", provides a cloud-based learning platform designed to provide free skills development programmes for up to 25 million African youths over five years, enabling digital competence and nurturing innovation in Africa.

The Digital – Nation Africa is designed to boost overall digital literacy, increase the number of skilled developers able to tap into cognitive engines, and enable entrepreneurs and prospective entrepreneurs grow businesses around the new solutions.

The initiative will be supported by the United Nations Development Programme (UNDP), which has a special focus on fostering market-driven ICT skills in Africa and the Middle East.

The Guardian. Friday, 10 February 2017

19.

Naira tumbles to 503 on parallel market

The naira tumbled against the United States dollar on the parallel market to 503 on Thursday, down from the 500 recorded on Wednesday.

The local currency had closed at 499 and 498 on Tuesday and Monday, respectively.

This came almost two weeks after the naira touched 500/dollar briefly and returned to 498/dollar.

The local currency had been stable against the greenback for about three weeks.

Punch. Friday, 10 February 2017

Other Economic and Business Indicators

GDP -2.24%
(Q3, 2016)
Inflation Rate
(Year-on-Year change)
18.55%
(December, 2016)
Unemployment Rate 13.9%
(Q3, 2016)
Underemployment Rate 19.7%
(Q3, 2016)
Monetary Policy Rate 14%
(December, 2016)
Inter-Bank Call Rate 10.39%
(December, 2016)
Prime Lending Rate 17.09%
(December, 2016)
Maximum Lending Rate 28.55%
(December, 2016)
External Reserve USD 28,755,645,762   
(10 February 2017)
Exchange Rate (CBN)
10 February 2017
USD: 305.00
POUNDS: 380.06
EUROS: 324.31
Exchange Rate (Parallel Market)
27 January 2017
USD: 506.00
POUNDS: 617.00
EUROS: 531.00
Liquidity Ratio 30%
Treasury Bill Rate (91 Days) 13.80%
(1 February, 2016)
Currency in Circulation (Million Naira) 2,179,174.28
(December, 2016)
Banks Reserves(Million Naira) 3,318,344.71
(December, 2016)
External Debt - FGN + States (USD million) 11,261.89
(as at June 30, 2016)
Local Debt - FGN only (NGN million) 10,606,334.22
(as at June 30, 2016)
Bank Credit to to Private Sector (NGN million) 22,374,718.08
(December, 2016)
Demand Deposits at Banks (NGN million) 9,699,750.76
(December, 2016)
Nigeria's Merchandise Trade 4,721.9 billion (Quarter 3, 2016)
Crude Oil $53.47 (OPEC Daily Basket, February 13, 2017)

Source: CBN, NBS and DMO
Compiled by: Research Department, NACCIMA
13 February, 2017